Monday, September 22, 2008

MORGAN STANLEY as expected, has put merger talks with WACHOVIA on hold per an article in the FT, after the Wall Street firm won approval on Sunday to turn itself into a traditional Fed regulated bank. The latter move has made a merger with a deposit-rich commercial bank like Wachovia less necessary, with talks potentially to be scrapped this week according to sources quoted. Otherwise the rpt says Morgan is still in talks with China's CITIC.

Sunday, August 24, 2008

a match made in hell for self-employed and conservative folks throughout this great country.

I am actually glad he picked Biden because I just really dont see what he brings to the ticket. Sure, he can help prop Obama up on the foreign policy front but thats about it. Oh, and this is the "change" ticket? If there ever was a Washington insider, its Joe Biden.

Saturday, June 7, 2008

“The most tax-effective method for making a gift to charity is not to write a check. It is usually better for you the donor if you can make a gift of appreciated property, i.e., low cost-basis stock, to the charity. By using this method, you are not required to recognize the appreciation on the stock for capital gains tax purposes, plus you can still take a charitable income tax deduction for the full value fair market value of the securities transferred to the charity.”

Monday, March 24, 2008

"We're in for a potentially significant regulatory response," said Glenn Hubbard, dean of Columbia University's business school and a former chief economist for the Bush White House, referring to the credit crunch and its impact on financial markets. "The hope is we won't overreact."Both advocates and foes of tighter regulation agree that high-profile breakdowns in quality control and accountability have fueled the pendulum swing away from voluntary industry standards. That shift has been accelerated by a growing public perception that American companies and regulators have lost a large measure of control over the safety and quality of products increasingly produced by a global supply chain.Democrats, and even some Republicans, are blaming lax federal supervision for safety problems with products ranging from all-terrain vehicles and lead-tainted toys imported from China to poorly operated nursing homes and faulty emissions controls at coal-fired power plants.The powerful House Energy and Commerce Committee wants to bolster the power of food and pharmaceutical safety agencies, after the largest beef recall in U.S. history last month, recalls of contaminated spinach, peanut butter and pet food last year, and recent deaths linked to batches of the blood thinner heparin whose active ingredient was manufactured in China.When lawmakers return from their spring recess March 31, they plan to begin work on what could be a sweeping overhaul of the financial regulatory system. Under the current system, responsibility is spread across at least eight agencies, an arrangement Securities and Exchange Commission Chairman Christopher Cox last week called "nearly irrelevant to today's market."Such statements, along with its efforts to ease the housing crisis by prodding mortgage giants Fannie Mae and Freddie Mac into raising billions of dollars in new capital so they can finance more mortgages, illustrate the Bush administration's shift away from its early reluctance to interfere in markets.A coming report from the conservative Heritage Foundation said the Bush administration finalized nearly 4,000 new rules, both large and small, in 2007, the most since it took office in 2001. The most sweeping among them included fine-particle emissions standards for smokestack industries; regulations governing blood transfusions and dietary supplements; side-impact collision standards for autos; and rules designed to protect chemical facilities from terrorists.Last week, aviation authorities ordered special maintenance checks at every U.S. airline, an unusually broad response to lapses in safety-inspection lapses found at Southwest Airlines.However, some of the Bush administration's regulatory moves -- such as easing pollution control requirements for agriculture and smokestack industries under clean air and water laws -- have followed lobbying from business groups, which feared stricter rules if a Democrat is elected president. Others have been ordered by courts, or passed by Congress in response to crises.All three major presidential candidates have shown willingness to pursue tighter rules during their time in the Senate, but have said little on the stump about what role government should play in patrolling the marketplace.Republican candidate Sen. John McCain of Arizona "does not have a reflexive regulatory versus deregulatory record," said Doug Holtz-Eakin, Mr. McCain's chief economic adviser. "He'll come down where he needs to...to effectively get safety, if that's the issue.""It's a fundamental obligation of the government to protect its citizens and where there are gaps in that protection [Sen. Hillary Clinton] believes in giving our safety agencies the tools they need to fill them," said Jake Sullivan, deputy policy director for the New York Democrat. That, he added, "should be done in a way that promotes partnership and cooperation with the private sector."Democratic Sen. Barack Obama of Illinois has pushed for tougher oversight and disclosure rules for lenders and credit-card companies and an overhaul of bankruptcy laws, which he feels were "written by the financial industry for their own benefit," said spokesman Bill Burton.Opponents of government regulation concede they face a difficult climate no matter what happens in November. "Obviously the crisis in the subprime [mortgage] market has revealed a regulatory weak spot," said David Chavern, chief operating officer of the U.S. Chamber of Commerce.Even before the subprime-mortgage crisis, the group had singled out government regulation as a key battleground for the next five years. "We're going to use the whole set of tools," including advertising and Web-based campaigns and studies on the costs of regulation, Mr. Chavern added, "putting the burden on the people who are calling for the regulations to show it's really going to work."One of the Chamber's priorities, he said, would be challenging energy, labor and environmental regulations.But the recent spate of recalls has split the business community. The Chamber and the National Association of Manufacturers have stuck largely to an antiregulatory agenda. Meanwhile, lobbyists for the sectors most directly affected by the recalls -- such as grocers and toy makers -- have backed tighter controls."We approached Congress last summer when recalls started to happen and asked them to make toy-safety testing mandatory," said Joan Lawrence, vice president for toy safety and regulatory affairs at the Toy Industry Association, the industry's biggest trade group. "We wanted to create a level playing field, so everyone is testing to new regulation," she added.Those on both sides of the issue agree that calls for more regulation are driven by public concern that the market hasn't moved fast enough to correct problems. "If you go back to the 1970s, one reason the push for deregulation was successful was that there were more horror stories" about everyday products like hammers whose costs to the government were grossly inflated partly because of burdensome regulatory-compliance reviews, said James Gattuso, a regulatory-policy specialist at the Heritage Foundation. "Now the anecdotes that get the attention are on the other side."The change in mood was evident this month in debate over a bill overhauling the Consumer Product Safety Commission. The agency was gutted during the Reagan era and had struggled ever since. Then, last summer came the first of more than 110 recalls affecting 35 million toys. Nearly half were for potentially toxic lead, putting the agency's Bush-appointed chairman -- and Congress -- on the hot seat.Two weeks ago, legislation beefing up the agency, introduced by Sen. Mark Pryor, an Arkansas Democrat, was approved by a veto-proof margin in the Senate with the help of Republican co-sponsors Sens. Ted Stevens of Alaska and Susan Collins

Tuesday, March 11, 2008

this is a great example of how ton analyze your particular financial situation:

We are a couple of 63-year-olds who retired about three years ago, and took SS at age 62. I have always felt that financial decisions made in the ten years between when we retired and age 70.5, when we cede withdrawal and tax control to MRDs, could be significant for the rest of our lives. In particular, the multi-variable decisions of account withdrawal sequencing, Roth conversion, and SS repay/restart seemed particularly important. But what decision is “best?” I have read many books, articles, and posts that address these decisions individually, but saw nothing that I could map wholly and quantitatively to our situation. So, this post describes what we did to figure it out for us. Have any of you done something similar? Did you come to similar conclusions? OUR PORTFOLIO We have a 60/40 portfolio comprised of about 80% IRA, 15% taxable, and 5% Roth. Our living expenses require a withdrawal rate of about 3.2%. We are well within the 15% FIT bracket. Our current WD approach has been: 1. Living expenses from IRA 2. Taxes and extraordinary expenses from taxable account (for as long as it survives, then switch to Roth) 3. Convert IRA to Roth up to the top of the 15% bracket for as long as we can The reason for this approach has been to get the IRA value reduced as much as possible as fast as possible, without taking “too big” a tax bite, so that RMD amounts are reduced when they hit us forever in seven years. Quantifying “too big” was part of the purpose of this exercise. ANALYSIS I build a model to see how different scenarios would play out over the next 40 years, accounting for inflation and taxes. The model consists of an Excel workbook of five spreadsheets, each of identical structure with about 50 rows and 35 columns. The differences between the spreadsheets implement the scenarios described below. Evaluation criteria 1. Total portfolio value over time (most important) 2. Maximum Roth account value (for maximum control) 3. Minimum excess RMDs (i.e., minimum required WDs over what we needed) 4. Minimum incursion into 25% bracket over the years Criteria 3 and 4 are viewed as hedges against expected future tax increases. Scenarios - Five were chosen: 1. Current approach (described above) 2. Living expenses and taxes from taxable until exhausted, then revert to current approach, plus Roth-convert to top of 15% bracket 3. Current approach but repay SS and restart at age 66, plus Roth convert to top of 15% bracket 4. Current approach but repay SS and restart at age 70, plus Roth convert to top of 15% bracket 5. Current approach but abandon Roth conversion – just stay low in 15% bracket until age 70.5 when RMDs take control Calculations – For every year from now to age 100, the model computes the following, adjusting for inflation and investment return every year: 1. Tax brackets, deductions, exemptions 2. SSI, pension, living expenses, extraordinary expenses (cars, etc.), fed/state taxes 3. IRA withdrawals, conversions, RMDs 4. Account values (taxable, IRA, Roth, total) Economic sensitivity – To assess scenario sensitivity to economic conditions, I ran the model for three conditions: 1. Mid – 7% return, 3% inflation 2. Low – 6% return, 4% inflation 3. High – 8% return, 2% inflation CONCLUSIONS The model shows that for our specific situation: 1. Scenario number 2 is always better than our current approach. 2. It is also the best scenario of all in Mid and High economic conditions. 3. Only in Low economic conditions does SS repay/restart become best, but that takes until age 87 to happen. We will change our approach to scenario 2 and forget about SS repay/restart. For our particular situation, there seems to be a "sweet spot" in all this: 1. Spend taxable account first. Pretty common wisdom, but it only works in our situation if we also make Roth conversions. Otherwise we save taxes early, but end up with bigger IRAs at age 70.5 and bigger RMDs requiring more taxes. 2. Convert as much as possible as early as possible 3. But not over the 15% bracket 4. Because the additional taxes (nearly double the rate) take too big a bite too early 5. Making it take too long for the portfolio to recover Again, this post describes what we did to figure it out for our situation. Have any of you done something similar? Did you come to similar conclusions?

Sunday, February 10, 2008

The National Association of Personal Financial Advisors is the nation’s leading organization of Fee-Only comprehensive financial planning professionals.Since 1983, NAPFA's ranks have enjoyed steady growth, operating under a strict code of ethics and our widely recognized definition of Fee-Only compensation. NAPFA members are trusted, objective financial advisors for consumers and institutions alike.Individuals join NAPFA to enhance skills, market services and be a part of a collective, influential voice on matters that affect them and their clients. Through the Find-A-Planner search function NAPFA offers consumers access to truly comprehensive, strictly Fee-Only financial advisors.At NAPFA, it is all based on a simple, straightforward mission. Professionals who become a NAPFA-Registered Financial Advisor are committed to the Core Values of the organization and agree to follow the NAPFA Fiduciary Oath and Code of Ethics. MissionTo promote the public interest by advancing the financial planning profession and supporting our members consistent with our core values. Core ValuesCompetency: Requiring the highest standards of proficiency in the industry.Comprehensive: Practicing a holistic approach to financial planning.Compensation: Using a Fee-Only model that facilitates objective advice.Client-centered: Committing to a fiduciary relationship that ensures the client's interest is always first.Complete Disclosure: Providing an explanation of fees and potential conflicts of interest.VisionThe public recognizes that NAPFA advocates the highest standards for personal financial planning and that NAPFA-Registered Financial Advisors are the most trusted advisors of choice.

Thursday, January 31, 2008

NEW YORK (CNNMoney.com) -- Faced with growing risks of recession, the Federal Reserve made its second deep interest-rate cut in a week and slashed a key short-term rate by a half-percentage point Wednesday.U.S. stocks, which had been slightly lower ahead of the announcement, surged on news of the rate cut but ended lower after a volatile final two hours of trading.The federal funds rate - an overnight bank lending rate that affects how much interest consumers pay on credit cards, home equity lines of credit and auto loans - was cut to 3.0% from 3.5%. The rate had stood at 5.25% only four months ago.The discount rate, which is what banks pay to borrow directly from the Fed, was also cut by a half-point to 3.5% on Wednesday. The cut was made at the request of nine of the nation's 12 Federal Reserve district bank presidents.The Fed slashed both rates by three-quarters of a percentage point in an emergency move on Jan. 22.Read the Fed statementOne member of the Federal Open Market Committee, Dallas Fed President Richard Fisher, voted against Wednesday's cut in the fed funds rate. He argued that rates should have been left unchanged after the series of rate cuts by the central bank in recent months. Fisher is generally seen as a so-called inflation hawk who is greatly concerned with maintaining price stability.The Fed, in its statement explaining the cut, acknowledged that the risk of inflation needs to be monitored, but said that the majority of its members believed that price pressures will moderate in coming quarters.The rate cuts were necessary because problems in the credit markets were putting a squeeze on both consumers and businesses, the Fed said. It added that it sees growing weakness in both the job market and the battered housing market."Today's policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity," according to the statement. "However, downside risks to growth remain."The Fed also appeared to hint that it will keep cutting rates if the economy shows more signs of decline."The committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks," the statement said.Keith Hembre, chief economist for First American Funds, said the statement suggested a greater likelihood of more cuts than he was expecting.Economy much weaker than expected"I thought that they would probably include some language to temper expectations of any additional cuts in the near term," he said. "That statement makes it sounds like they're still in motion."Wall Street is now betting on more rate cuts in the next few months. According to federal funds futures trading on the Chicago Board of Trade, investors are pricing in a 100 percent chance of at least another quarter point cut by May and a 70 percent chance of rates being a half-point lower than there were after this move. The Fed is scheduled to meet next on March 18 and April 29-30, but has no meetings scheduled for May.But one economist said that further rate cuts could be justified, and that it makes sense for the Fed to build on its emergency cut of a week ago, even if some see it as caving to market pressure."They could have gotten away with a quarter, but that risked undoing every thing they did a week earlier. They are now ahead of the curve," said Mark Vitner, senior economist with Wachovia. "Vitner said he's not surprised that the fed funds futures indicate that investors expect more cuts. "You give them an inch, and they want a mile," he said. But he's also expecting a quarter point cut at each of the next two meetings."Given where the Fed says the risks lie, you have to ask yourself, 'Are financials markets going be all that less stressed by March?'" he said. "I think the answer to that is, 'Probably not.'"But economists who are concerned about inflation criticized the Fed move, and its apparent lack of attention to price pressures."Higher prices are coming, even if the economy slows to a crawl," said Rich Yamarone, director of economic research at Argus Research. "We've seen price increases in company announcements, in our grocery bills and in the economic data. The Fed is telling you they're going to watch it because that's in their mandate. But I think they'll turn a blind eye to that."The rate cuts came on a day the government reported that economic growth slowed significantly in the last three months of 2007, matching its weakest performance of the past five years. It also comes as Congress rushes to pass a $150 billion economic stimulus package to spur spending by both consumers and businesses.

Thursday, January 24, 2008

Washington Sets $150 Billion Plan To Jolt EconomyPackage Includes Boost For Big Mortgages, Rebates for TaxpayersBy SARAH LUECK, TIMOTHY AEPPEL and MICHAEL M. PHILLIPSJanuary 25, 2008WASHINGTON -- Congress and the White House hammered out an economic stimulus package that would put $150 billion into the hands of consumers and businesses while seeking to revive the market for large mortgages.It was a rare display of compromise and speed in a city known recently for partisan gridlock. Both parties were responding to middle-class economic fears, as election-year nerves are frayed by a seesawing stock market, a wave of home foreclosures and a credit crunch. "I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy," said House Speaker Nancy Pelosi.House Speaker Nancy Pelosi, center, Treasury Secretary Henry Paulson, left, and House Minority Leader John Boehner discuss the economic stimulus plan.Economists said the measures, coming as the risk of a downturn rises, could boost growth this year by between three-quarters of a percentage point and a full point.One important provision temporarily raises the dollar limit on mortgages that can be bought or guaranteed by government-sponsored mortgage giants Fannie Mae and Freddie Mac. The current limit of $417,000 would rise above $600,000 and perhaps as high as $730,000 in the most expensive areas, congressional leaders said.The centerpiece of the package is $100 billion in tax credits for an estimated 117 million families this spring. Most individuals who pay income taxes would get $600; working couples would receive $1,200. Workers who make at least $3,000 but don't pay income taxes would get checks of $300 to $600. People in both groups would get $300 credits for each of their children.Top Democrats said they intend to send a bill to President Bush by Feb. 15. If that happens, rebate checks or electronic transfers would probably arrive between May and July.Businesses would be able to deduct an additional 50% of the cost of certain investments in 2008. In addition, small businesses would be able to write off more expenses from their taxes: $250,000, up from $125,000.Richard Seaman, the chief executive of Seaman Corp., a maker of industrial textiles used in everything from roofing to military tents, had planned to put off $2 million in equipment purchases for as long as two years."But with this tax break, we'll probably move it forward to get within the time boundaries," he said. Mr. Seaman had lunch yesterday with four major customers and asked them about the prospect of tax breaks. "There was quite a bit of enthusiasm," he said.Phased OutThe checks would be gradually phased out for wealthier taxpayers. Couples with income of more than $174,000 would get nothing, unless they have children.President Bush announces his support of an economic stimulus package that includes refunds for tax filers and a measure to help the mortgage market. Video courtesy of Fox News.The Dow Jones Industrial Average climbed 108.44 points, or 0.9%, to 12378.61 after a late round of buying stirred by optimism about the stimulus plan.In crafting the deal, leaders of both parties were forced to give ground. Democrats wanted new spending on food stamps and unemployment benefits, but didn't get it. Republicans held their noses and agreed to $28 billion in credits for 35 million families who don't pay income taxes. They also gave in to the cap that stops wealthier people from getting checks. Bush administration officials had earlier floated a plan to give $800 rebates to all income-tax payers."Philosophically, as Republicans, all people who pay taxes ought to get tax relief," said House Minority Leader John Boehner of Ohio after the deal came together.Ms. Pelosi said that despite her misgivings, the plan "is about putting money in the hands of America's working families." Mr. Boehner added, "We wanted to get money back to middle-class families as efficiently as possible."The deal's speed, negotiated during a week of meetings between House leaders and Treasury Secretary Henry Paulson, is testimony to that concern. In the rush, some details got muddled. Ms. Pelosi's office at one point yesterday issued a fact sheet that gave the new Fannie and Freddie limit as $625,500, while other congressional leaders put the figure at around $730,000.The House plans to vote on the bill in early February, bypassing the usual committees.Weighing InSenators, who weren't heavily involved in the talks, now get a chance to weigh in. The Senate's tax panel chairman, Democrat Max Baucus of Montana, said he would take up a stimulus bill next week. Some Democratic senators are hoping to modify the agreement by adding unemployment benefits, food stamps and road repair. And the nation's governors are still calling for $12 billion in aid for Medicaid and other programs.Democratic leaders said the debate might be freewheeling but they would aim for a speedy conclusion. "We will move quickly...and we should not get bogged down in a lot of details," said Mr. Baucus.The loudest complaints about the plan came largely from the left. "This is no time for Congress to throw in the towel," said AFL-CIO President John Sweeney in a written statement calling for the Senate to put unemployment benefits and food stamps back into the package. He said Congress should "get money into the hands of those who will spend it quickest and need it most."INSIDE THE DEAL

-Tax rebates: Checks of at least $300 for almost everyone earning a paycheck, including low-income earners who make too little to pay income taxes, so long as they earned at least $3,000 in 2007. Families with children would receive an additional $300 per child, while those paying income taxes could receive higher rebates.-Business tax write-offs: Spurring business investments with so-called bonus depreciation and more generous expensing rules.-Housing rescue: Raising the limit on Federal Housing Administration loans and boosting the cap on loans that Fannie Mae and Freddie Mac.The Internal Revenue Service expects to be able to begin mailing out checks and making electronic transfers by May, said Mr. Paulson. He told reporters the "lion's share" of payments would be completed within the following 10 weeks.Doug Elmendorf, an economist at the Brookings Institution, estimated the package would add roughly 0.7 percentage points to growth in gross domestic product for 2008, with the effects concentrated in the second half of the year. In addition, Mr. Elmendorf said, business and consumer confidence should get a boost from the assurance that help is on the way.However, he warned, "one should not expect that everything will be rosy because this deal has been worked out."A small but notable contingent of economists, largely on the right, questioned whether the stimulus was needed at all. Harvard economist N. Gregory Mankiw, a former Bush adviser, argued that the rescue package is overkill at a time when unemployment measures 5%, a low rate historically."Monetary policy is the first line of defense against recession, and I think it's doing its job right," Mr. Mankiw said, referring to the Federal Reserve's series of interest-rate cuts since last August. "I'm not convinced yet that fiscal policy is necessary at this point."Senate Budget Committee Democrats said Wednesday that a $140 billion stimulus package would add about $100 billion to the deficit in fiscal year 2008, which began in October, bringing the total deficit for the year to about $350 billion.Harvard economist Martin Feldstein, a former adviser to President Reagan, told the Senate Finance Committee it would be better to make a stimulus package contingent on signs of impending recession, such as repeated increases in unemployment. But he said the economy's deterioration is "enough to make an immediate fiscal stimulus better than doing nothing at this time."Only Go So FarSome company chiefs warned a stimulus could only go so far in propping up the economy. "Our particular business is tied to the auto industry, and if cars aren't selling [the stimulus is] probably not going to get us to go out and buy a new machine," said Kim W. Beck, chief executive of Automatic Feed Co., a Napoleon, Ohio, maker of presses used to stamp out car bumpers and other metal pieces.Mr. Beck said he still has no plans to buy any machines this year. If he was on the fence about a purchase, "then you might be influenced," he said.Dean Garritson shares that conservative view. As president of Green River Cabins -- a Campobello, S.C., maker of log homes used mostly as vacation getaways -- he is planning to buy some equipment this year, including a new overhead crane for his factory. But a much bigger expansion plan is staying on the shelf. His business is strong, he said, but mainly because three regional competitors have gone out of business in the wake of the housing bust."I would never go off and do dumb stuff like dramatically increase capacity of my plant when I don't have the orders," he said.--John D. McKinnon contributed to this article.

Thursday, January 17, 2008

There are several requirements common to all levels of membership and affiliation. Everyone who joins the organization must meet the NAPFA definition of Fee-Only. In short, this means that you cannot earn any transaction-based compensation from financial planning related activities.Commissions of any type from current business and trails or renewal from past business are a couple of examples of prohibited compensation. Additionally, you can't be affiliated with a commission-earning firm like a broker/dealer or insurance agency. Everyone who is currently employed in the financial services profession will be asked to submit Part II and Schedule F of your current Form ADV (or equivalent).

Friday, January 11, 2008

Yesterday morning, Ernest Wilford went to the Jags facility at 5am to work out like he does every day. He got done about 6:30 and went to a little breakfast place near the stadium, just like he does every morning. The couple who owned the place weren’t there so he asked the young cook where they were. He told them that they’d been a car wreck the night before and were in the hospital. Ernest skipped breakfast and went to the hospital. When he got there, the couple were in stable condition, but being held for more tests. Their 3 kids had been there with them all night. Their Aunt had picked them up the night before and brought them to the hospital but had just left to go home to get dressed for work. Ernest asked the parents if he could take the kid with them. He took them to the Jags facility and let them shower up in the locker room after a long night. He went to the team manager and found some clothes for them to throw on. They followed him to the film room and sat in the back while they broke down tape. They then followed him to practice and sat on the sidelines during practice. After a full at the facility, Ernest went to my Dad’s store and bought the kids and parents jerseys. Of course, when asked what player they wanted, Ernest interrupted the kids and told them they had better answer that question correctly lol. The kids then went home with Ernest and had dinner with him and his wife. After dinner, he got a call saying the parents were being released so he took the kids back to the hospital.